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Industry Insights Series Q2 2020
Gerry Caley, Senior Partner
Over the years I have listened to numerous economists, investment experts, research analysts and world-renowned authors discussing everything that has affected the markets over the last 300 years or so. Until recently however, not one of them had mentioned a little-known place called Wuhan in China. Our latest enemy, Covid-19, has not just attacked a particular country or people, but spread around the world in what could easily have been the plot to a science fiction story.
On this occasion, I would say that the jury is still out on whether we have collectively done enough to combat this outbreak, a topic that will certainly be debated on Question Time for the foreseeable future. Meanwhile, as financial advisers we have an important job to do – advising and guiding our clients through this latest mire with our knowledge of the financial services industry and expertise. Saying that, I must admit that I have never wished to be an 'expert' on anything, having been told by a learned colleague many years ago that an 'ex' is a 'has been' and a 'spurt' is a drip under pressure!
Many clients ask us what they should do when something catastrophic affects the markets and consequently negatively affects their portfolio fund values. Generally, I would say to do nothing initially. I know that this runs contrary to the instinctive response to cut any further losses, but by waiting until the dust settles you are able to make informed decisions that will benefit your investments’ performance over the longer term. Of course, it may be that your particular circumstances mean that a different approach is needed, and I would always recommend giving your financial adviser a call to talk through all the options available.
It is important to remember that whatever your portfolio value is showing (especially at times like this), it is only a paper loss or gain until something is sold. If you panic and sell prematurely, you will most likely create a real loss. You should keep in mind that investments are real asset backed securities – investing is not like betting on a horse, whereby if the horse falls or fails to make the winning post you will definitely lose your money. Markets do recover, whatever the cause of their distortion, be it short or long term.
If you have any questions for us or to discuss any aspect of your financial planning, please do not hesitate to contact the GDA Team.
Industry Insights Series Q2 2020
Gerry Caley, Senior Partner
Over the years I have listened to numerous economists, investment experts, research analysts and world-renowned authors discussing everything that has affected the markets over the last 300 years or so. Until recently however, not one of them had mentioned a little-known place called Wuhan in China. Our latest enemy, Covid-19, has not just attacked a particular country or people, but spread around the world in what could easily have been the plot to a science fiction story.
On this occasion, I would say that the jury is still out on whether we have collectively done enough to combat this outbreak, a topic that will certainly be debated on Question Time for the foreseeable future. Meanwhile, as financial advisers we have an important job to do – advising and guiding our clients through this latest mire with our knowledge of the financial services industry and expertise. Saying that, I must admit that I have never wished to be an 'expert' on anything, having been told by a learned colleague many years ago that an 'ex' is a 'has been' and a 'spurt' is a drip under pressure!
Many clients ask us what they should do when something catastrophic affects the markets and consequently negatively affects their portfolio fund values. Generally, I would say to do nothing initially. I know that this runs contrary to the instinctive response to cut any further losses, but by waiting until the dust settles you are able to make informed decisions that will benefit your investments’ performance over the longer term. Of course, it may be that your particular circumstances mean that a different approach is needed, and I would always recommend giving your financial adviser a call to talk through all the options available.
It is important to remember that whatever your portfolio value is showing (especially at times like this), it is only a paper loss or gain until something is sold. If you panic and sell prematurely, you will most likely create a real loss. You should keep in mind that investments are real asset backed securities – investing is not like betting on a horse, whereby if the horse falls or fails to make the winning post you will definitely lose your money. Markets do recover, whatever the cause of their distortion, be it short or long term.
If you have any questions for us or to discuss any aspect of your financial planning, please do not hesitate to contact the GDA Team.
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